V8s gassed up for foreign expansion

Hard on the heels of announcing its expansion into the United States in 2013, V8 Supercars is working on deals to stage races in India and Singapore.

Chairman Tony Cochrane, who emerged with a 5 per cent stake in V8 Supercars when private equity firm Archer Capital paid $180 million for 60 per cent of the company in May, said it would sign a heads of agreement with a race promoter in India in the next couple of months.

Plans to stage the first V8 Supercars race in Singapore in April next year stalled when the Japanese company building a new race track there ran into financial difficulties. Mr Cochrane said he was talking to the Singapore government about finding another venue.

The international expansion of V8 Supercars was in train well before the company gained its new majority shareholder.

“We’ve been working on this for a number of years," Mr Cochrane said. “Archer shares our vision and is very supportive."

Mr Cochrane has run V8 Supercars since 1997, initially as a partner in Sports & Entertainment Ltd, which sold its 25 per cent stake to Archer (the V8 teams sold down their stake from 75 per cent to 35 per cent).

According to V8 Supercars, the last time an Australian sport was exported to the US was 1987, when a State of Origin rugby league game was staged in California.

V8 Supercars already holds races in New Zealand and Abu Dhabi, and has held a one-off event in China. Last year the Federation Internationale de L’Automobile gave it permission to run six races a year outside Australia.

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The move into the US, which Mr Cochrane described as “the home of motor sport", is the company’s biggest overseas move.

The US motor sport market is dominated by NASCAR, which stages 38 races a year and is, Mr Cochrane said, “a massively entrenched sport". “We’re not going to the US to take on NASCAR, not at all," he said.

“We’re aiming to be a niche sport, appealing – over time – to 1.5 million to 2 million people in a country of 300 million. NASCAR is a big sport and brand in the US, but we think there is room for us."

Local promoter Circuit of the Americas (COTA) will stage its first race in April or May 2013 at a new venue being built in Austin, Texas.

COTA has signed a five-year deal to stage one race a year and will underwrite the races. It will keep the revenue generated from ticket sales, sponsorships and corporate hospitality events, paying V8 Supercars an undisclosed fee.

Speed, a US pay television channel produced by News Corp’s Fox Sports division, which is run by Australian David Hill, has been showing V8 Supercars races for 18 months.

The races are shown about a week after they are staged in Australia and draw anywhere between 100,000 and 600,000 viewers. Mr Cochrane said from October Speed would show its races live or delayed by 24 hours.

“The coverage on Speed meant that we were starting to be approached by various circuit owners in the US who were interested in staging one of our races," he said. “That’s how the talks with COTA started."

Both V8 Supercars and COTA will sign sponsors for the US races. Mr Cochrane said he was already talking to two of V8 Supercars’ Australian sponsors about buying the naming rights to the US races.

This month V8 Supercars signed a deal with Rush Sports Marketing & Investment, which operates in Britain and Asia, to sign sponsors outside Australia.

“Our local sponsors are interested in the move into the US," Mr Cochrane said.

“We’re seeing interest from Australian companies that are selling into, or want to get into, the US and from the Australian subsidiaries of US companies that already work with us."

The US races will be included in the new five-year TV, online and mobile phone rights deals V8 Supercars is aiming to strike with Australian companies later this year.

Its current deals with Seven West Media, Telstra and Premier Media Group (producer of the local Fox Sports pay TV channels) bring in $34 million a year. Mr Cochrane said speculation it wanted to lift that to $60 million was broadly correct.

V8 Supercars’ existing Australian media deals expire in late 2012, but Mr Cochrane said he wanted to set up new five-year deals later this year, which would take effect in 2013.

Unlike most sport organisations, V8 Supercars produces its own TV coverage. It currently sells the coverage to 32 TV networks around the world, up from three a decade ago, and Mr Cochrane said it would spend the next year negotiating more sales in Europe “which is our weak link".

“Seven is our biggest TV customer and the most demanding," he said. “But the coverage is ours and Seven is not our only customer."